Implementation of WTO rules on textiles criticized

Implementation of WTO rules on textiles criticized

JAKARTA (JP): Developing countries in the Asia-Pacific region
have been disturbed by a virtual backslide by the developed
countries in implementing a multilateral agreement on the trade
of textiles and clothing.

Adrianus Mooy, the executive secretary of the Economic and
Social Commission for Asia and Pacific (ESCAP) -- a United
Nations body -- said here yesterday that there was widespread
criticism of the way the agreement was being implemented.

"There was a general feeling that the first phase of the
integration program has been rather unsatisfactory," Mooy said at
the closing of a three-day meeting of senior ESCAP officials.

The agreement on textiles and clothing is part of the World
Trade Organization's (WTO) built-in agenda for further
liberalization.

The agreement is designed to integrate textiles and clothing
into the WTO's coverage so that by the end of its transition
period in 2005, the WTO rules will apply to the whole textile and
clothing industry.

The first stage of integrating textile and clothing into the
WTO should have occurred in the first 18 months of the
agreement's implementation, starting Jan. 1, 1995, under the
supervision of a textiles monitoring body.

"The textiles monitoring body has been largely ineffective in
stopping a virtual backslide," Mooy said.

He said the virtual backslide by developed countries occurred
because there were insufficient rules.

It is expected that developed countries will maintain their
non-tariff barriers, certainly until 2005, to restrict textile
imports from developing countries to protect their own mature
industries.

These non-tariff barriers include resorting to transitional
safeguards, unilateral changes in the rules of origin, new
restrictions arising from regional integration and ignorance of
commitments in quota growth rates.

Although articles 2 and 3 of the agreement on textiles and
clothing require all members to progressively phase out all
restrictions inconsistent with the WTO, article 6 of the
agreement permits the introduction of new quantitative
restrictions by all members on products which have not yet been
covered by the agreement.

The United States, for instance, has enforced a new set of
rules of origin on the import of a wide range of products, from
T-shirts to pants, since July 1 this year. The introduction of
new rules of origin have angered many textile exporting
countries, including Indonesia.

"The implementation of the agreement cannot yet satisfy all
the textile and clothing exporting countries... They have not
felt any significant impact from the liberalization process in
the sector in the last two years," the chairman of the meeting,
Soemadi D.M. Brotodiningrat, said.

The purpose of the three-day meeting here was for ESCAP
members to exchange views and prepare the way for the first WTO
ministerial meeting in Singapore in December.

Concern

Soemadi said the textile and clothing industry now had a
regional perspective because the countries in the ESCAP region
were now the largest and most dynamic textile and clothing
exporters in the world.

He contended that some countries in ESCAP, like Pakistan with
60 percent of its non-oil exports being textiles and clothing,
have expressed concern.

"If the textile and clothing sector has not been addressed in
the last two years, what do they get out of joining the WTO,"
Soemadi said.

The region now accounts for almost 60 percent of the world's
textile and clothing exports, for almost 60 percent of world's
exports to North America and for more than 40 percent of the
world's exports to the European Union. At the same time, the Asia
Pacific region heavily relies on North America and the European
Union as markets. The agreement on textiles and clothing is of
great importance to the region.

The textile and textile-related industries of Indonesia are
one of the country's largest foreign exchange earners with an
annual export value of around $6 billion.

Mooy said the upcoming Singapore meeting should not be
overloaded by new issues but should focus on reviewing the
implementation of WTO agreements.

"Participants felt that the Singapore ministerial conference
should reaffirm commitments to implementing the agreement
faithfully, and concrete steps should be taken to strengthen the
textile monitoring body as an instrument of liberalization of
this sector," Mooy said. (rid)